how to start up… · financial well being via small business ownership and commerce. i especially...

AND REMAIN

IN BUSINESS. A SIMPLE PROCESS.

AKINO A. DAVIS.

HOW TO

START UP…

HOW TO START UP…AND REMAIN IN BUSINESS.

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AND REMAIN

IN BUSINESS. A SIMPLE PROCESS.

AKINO A. DAVIS.

HOW TO

START UP…


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HOW TO START UP…AND REMAIN IN

BUSINESS.

A SIMPLE PROCESS.

First Edition Print Copyright © December 2008

By Akino A. Davis.

All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system or transmitted

in any form or by any means, electronic, mechanical,

photocopying, recording or otherwise, without the

prior written permission of the publisher.

Published By:

Kingdom Coaching Company.

Address: #19 Arcadia Avenue, Paradise East,

Tacarigua, Trinidad, W.I.

Telephone: 1-868-337-5886

Email: [email protected]

Website: www.kingdomcoach.webs.com /

www.smedirect.webs.com

Cover Design by: Akino A. Davis.

Printed in The Republic of Trinidad & Tobago


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TABLE OF CONTENTS.

Dedication page 05

Introduction page 06

How to Use this Manual page 08

SECTION ONE:

How to Start a Business.

Chapter 1 page 10

Developing Your Ideas

Chapter 2 page 14

Selecting Your Business Entry Level

(Part time or Full time)

Chapter 3 page 16

Making the Business Legal

Chapter 4 page 20

Writing a Successful Business Plan

Chapter 5 page 25

Getting Start Up Capital

Chapter 6 page 30

Establishing Financial Controls

Chapter 7 page 33

Considerations at Start Up

Concluding Section One page 45


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Dedication

This book is dedicated to all the young and not so

young individuals with an internal and overwhelming

desire to seek out and obtain self liberation and

financial well being via small business ownership and

commerce.

I especially dedicate this book to my Mother, Gloria

Wilson-Thomas for laying the foundation as an

Entrepreneur and for giving me a business education

that could never be taught or learnt in any school. May

God Bless Her Soul, see you in Heaven.

Furthermore, I dedicate this book to all my other

family, friends and onlookers, who have endured my

perseverance and ambition to become a successful

businessman and example to them.


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Introduction

As a young boy growing up, I have always been

exposed to entrepreneurship and small business start

ups, operations and development. My mother, for as

long as I could remember was always self employed.

There was only one time in my mid teens where she

took employment but still maintained a successful

business. In the 1980’s my mother started as a “street

vendor”, meaning she had no fixed place of operation

except for the streets of San Juan a budding town in

east Trinidad.

Eventually as she became more successful as a

merchant she relocated to the capital city of Port of

Spain and this is where my real education as an

entrepreneur started.

On my mother’s instruction and guidance, my primary

and secondary school years were spent pedaling goods

and other items throughout the city. I would sell from

lemon to lipstick, even belting out sales slogans in my

sleep at nights. Soon enough though we were able to

set up a permanent building structure in our village,

were we sold small food items, snacks and drinks.

In 2003, mom moved back to St. Vincent the country

of her birth after spending twenty seven years in

Trinidad and Tobago. In St. Vincent and before her

death in June 2010, she successfully operated a

successful fast food café and variety store.

It is this training as a boy and teenager together with

my own experiences as an employee and successful

businessman and the formal education received along


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the way that I set out to present this book: HOW TO

START UP… AND REMAIN IN BUSINESS as

an applied and proven guide for starting and remaining

in business.

In my endeavors as an entrepreneur, these guides have

allowed me to start and operate several businesses in

Trinidad and Tobago, even the company which

publishes this book.

In this book I don’t attempt to re-invent anyone else’s

principles but only to compile steps and strategies as

they have been useful to me, as I am sure they will

prove useful to you also. Read on then if you are ready

to learn HOW TO START UP… AND REMAIN

IN BUSINESS, A Simple Process.


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How to Use This Manual

This Manual is a guide for aspiring entrepreneurs and

future business owners on the ABCs of starting up and

successfully managing their ventures. This manual is

not a fool proof guide and no claims of guarantee are

suggested herein. It is my belief that the success of a

small business or any business is dependent upon the

management and vision of the business owner and the

team operating the business.

I hope that as you read this book, the information will

inform you accordingly and that you make the

decisions that is right for your business to start and

remain a success in the marketplace.

Wishing you all the best of success!


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SECTION ONE

HOW TO START

A BUSINESS


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Chapter 1

Developing Your Ideas

Every new business starts with an idea. Ideas can be

unique to the one who possess it but many a business

has been started from the modification of existing

business ideas. Your idea is the most important seed

for your business and one must seek out to guard your

idea and protect it.

A business idea, though birthed in your mind and heart,

can be easily stolen, copied or modified. Having a

business idea does not give you ownership of a

business but it is only when this idea is developed and

your business started can you give claim to the

business.

The development of your business idea is an essential

step. Having a unique idea does not guarantee that your

business will be successful. The idea is merely a seed

and you need to nurture it to a stage where it can

morph into a successful business. Developing a

successful business idea will involve the following

steps:

• Journaling your Idea

• Conducting Idea Studies

• Crunching Start up Numbers

Journaling Your Idea: Your memory grows more

fragile with age, so it is advisable that you write down

your ideas. Keep a journal or writing pad handy. There

are times when I go through phases of “idea storms”


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and it usually serves me well to keep a writing pad and

pen close by at all times; even at my bedside in the

night. If you are as excited an entrepreneur as I am, you

will not remember ever idea that comes to mind, so

journaling is important.

Most ideas that come through your mind may not stick

and keeping a journal of your ideas will serve as a sort

of filing of your ideas. As an entrepreneur you too will

realize that memory space is important to you and the

less stuff you have in your mind will serve to increase

your thinking capacity. This leads us to step two.

Conducting Idea Studies: After recording your

unique or existing idea, you can now review each your

idea(s) more carefully. This is what I call the idea

elimination stage. Here you can engage in a bit more

research on your idea industry to see if indeed there is a

place for your idea in the business market place.

Not all unique ideas find a place in the market, even it

appears to be a “messiah idea” that is, an idea that you

know will solve a problem. For example, in 2007 I

came across an idea that was highly popular in Europe

and North America for generations before. It is the

conversion of shipping containers into affordable

housing and other building uses.

In my research I discovered that the technology was

very easy to apply to my local industry and that indeed

I had found the “Messiah Idea.” I drew up exquisite

floor plans, did a sound business plan and invited

associates to invest in the idea.


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When we launched the “C.U.T.E – Container Units To

Enjoy” in August 2008, the idea and designs generated

huge fanfare and interest. Unfortunately to this day

(September 2010) we have not been able to secure a

sale for our units. What was our problem? Well we had

a “Messiah Idea” but nobody wanted to be saved. We

underestimated the culture of our local citizens.

Our target market then did not appreciate the idea of

dwelling in a “steel box” even though it looked better

than and cost cheaper than a traditionally built house or

building. I failed then to study our unique idea carefully

and to take into account the culture of the homebuyer.

What resulted was me becoming indebted to several

investors and I didn’t even make money from the idea.

You can save yourself time, effort, energy, money and

some shame if you carefully study your business ideas.

Determine firstly if your idea is wanted by your target

customers. If it isn’t at that point in time, create a file,

store it away and move onto the studying the next idea.

Notice I advised you to store away your ideas if they

are not feasible when you did your initial study. Storing

ideas is important because after time when markets,

environments and cultural acceptance change, these

ideas can be resurrected and developed into successful

businesses.

Anyway, after two years, we were able to resurrect our

“Container Housing” idea. As it turns out now the market

for rental housing is huge and we were able to adapt

our designs to the housing rental market. Let’s just say

we were fortunate not to discard the idea file.


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Crunching Start Up Numbers.

So you’ve journal and studied the ideas. The next step

is to crunch the start up numbers. A simple idea can

cost much to implement but this can be structured into

smaller segments if you crunch the numbers for start

up. One has to remember that each business must start

with small steps and though you may possess a large

vision, the business must start somewhere.

Starting small and growing gradually is an almost sure

path to success. By crunching the numbers, you can

determine what it will cost to get you started on this

path and will instruct you in your way in further

developing your idea(s) into a business you will enjoy

doing.


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Chapter 2

Selecting Your Business Entry Level

After doing the feasibility study to determine the

viability of converting your business idea into a

successful business, your next step is to determine what

level of entry you will pursue in the establishment and

operation of the business. Ideally there are two levels of

business entry levels to be considered when deciding

on this matter, they are:

1. Part Time Entry and

2. Full Time Entry.

Part Time Entry.

There are several factors which determine whether it is

better suited for small businesses to be started as part

time businesses. These factors include the level of

income generated, the need or not for employees, and

the operator confidence. Where it is established that

the business will not satisfy these factors, an

entrepreneur should choose to start their business on a

part time level.

In fact it is recommended by other successful

entrepreneurs that new small businesses should be

started part time to allow for the business to adapt to

the market and for the owners to learn more of the

market conditions, industry challenges and to develop

naturally.

Part time entry is also ideally suited to small businesses

starting out with very limited budgets and cash flow.

This form of entry offers the entrepreneur to continue


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in a day job, where cash can be saved and contributed

to the development of the business as well as for

enjoying further opportunity for learning and personal

development, which will redound to the benefit of your

small business.

Full Time Entry.

Full time business entry is best suited for the more

confident entrepreneur. Ideally the business owner

should have a healthy savings to mitigate against slow

business startup and not have to worry about meeting

the needs of living expenses for his/her family. A full

time business entry offers greater flexibility in operating

and growing the business as the restrictions that

accompany a part time entry is non-existent.

Choosing to start your business on a full-time basis will

require that greater planning and control be designed

and established before a decision is made in this regard.

Careful analysis of the market and business planning

should be undertaken and a sound business plan should

be written to convince investors that it is worth

investing in your business.

Even where your own funds are to be used for starting

your business full time, it is still important to plan

properly. Because your own personal finance is at risk

the need for proper planning should be greater when

starting out. Whether choosing to start part time or full

time, you should be clear to recognize the benefits and

challenges of both levels of entry and employ the

necessary feasibility and planning procedures to ensure

success at the chosen level of business entry.


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Chapter 3

Making the Business Legal

Now that you have drafted a solid business plan you

are confident will allow you to attract investors to

finance your business idea, you need now, to give life

to the business in itself. Neither Banks nor investors

lend to ideas therefore the business idea must be given

a life. A type of “personification” or making the

business a Legal entity.

When a business is registered or incorporated, it gives

legitimacy to its operations and the objectives of the

business plan. It also inspires confidence in the owner,

its customers/clients and its investors. Registration or

Incorporation also facilitates payment of government

and personal income taxes from income to be derived

from the activities of the business.

There are several types of legal structures for operating

a business. Here in Trinidad and Tobago and the

Caribbean and maybe most Commonwealth Countries,

you will encounter the three (3) main forms of ways to

make your business legal. These forms of structures

are;

1. Sole Proprietorship,

2. Partnerships/Firms and

3. Limited Liability Company.

Sole Proprietorship: This form of registration is the

simplest form of business structure within which you

can operate. It is sometimes referred to as Sole Trader

Business. In this structure an individual may register a

business name and conduct his or her business under


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such name. The main advantage to operating under this

type of registration is that the process in itself is a very

easy process to undertake.

In this structure, the individual assumes all the

responsibilities and or liabilities of the business, which

may include bad debts or other type of liability. All

business operations account to the personal name of

the business owner and will reflect on the individual’s

credit health and personal reputation. The registration

process is a three step process which includes:

1. Undertaking a Business Name Search.

2. Obtaining an Individual Income Tax Registration

Number and

3. Registering the Approved Business Name to make

the business legal.

Partnership/Firm: A partnership or firm is a type of

business structure where two (2) or more individuals

come together to register a business. In a partnership

or firm, each partner assumes shared responsibilities

for the responsibilities and liabilities of the business. As

in the case of the sole proprietorship type, the partners

are personally liable for any legal or other action that

may be brought against the business.

The process of registration of a partnership or firm is

quite similar to that of the sole proprietorship. The

process includes:

1. Undertaking a Business Name Search.

2. Obtaining Individual Income Tax Registration

Numbers for each partner and


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3. Registering the Approved Business Name to make

the business legal.

Limited Liability Company: A limited liability

company structure is far more complex than both the

sole proprietorship and the partnership/firm structures.

This type of structure establishes the business as an

individual in itself. It makes the company a separate

entity from the owners.

The business has a life of its own and is treated as such

in law. It is taxed separately from the individuals; (who

themselves are still taxed from earned personal

income), the business is liable for any bad debts or

other liabilities and shields the owners or directors

from personal responsibilities for such liabilities.

A limited liability company must be incorporated by a

minimum of two (2) persons referred to as directors.

This type of business structure is well suited to large

corporations which require a board of directors which

is appointed by the shareholders or owners, a set of

operating rules known as the bye-laws and a host of

other policies for governance.

It my advice that any person seeking to register this

type of business structure should seek professional

legal assistance as this type of structure is way more

complex to incorporate than the previous two types of

business structures.

Many corporations have started out as sole traders and

as partnerships and for your business, when the time is

appropriate and your business have outgrown its

structure, then it is best to shift the legal structure of


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the business to a corporation, which is a limited liability

company.

Remember that any business activity that is conducted

deliberately outside of the structures discussed is an

illegal business! Will this then create a problem for teen

businesses? Teenagers not yet having attained the

voting age or the age to acquire a National

Identification Card and who operate a business should

seek to have their businesses registered in their parents

name or in the name of an adult they can trust.

Be sure to have a legal contract drawn up to ensure that

funds are accounted for that that transfer of the

business or any assets thereof will take place on the

teenager reaching legal age to operate his or her own

business.

Remember the Kid Actor from the Home Alone

Movies? And what of the countless others who had to

take their parents or guardians to court to reclaim their

business and assets. Making your business legal is

making your business safely yours!


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Chapter 4

Writing a Successful Business Plan

For all products or services ever invented, it is

accompanied by a manual. This manual is simply a

guide or set of instructions in the operation of same

product or delivery of service. Such is A Business Plan.

Simply put, a business plan is your guide, a manual that

will lead you along your path to starting up and

maintaining a successful business. There are many types

of business plan but we will focus on the Start up

Business Plan.

A business plan has many aims. It is primarily used to

obtain financing such as bank loans, grants, private

investment and other sources of capital investment for

starting the proposed business. For this primary reason,

a business plan should be drafted as realistic as

possible, based on researched facts and not on

“dreamed up” concepts.

The business plan also serves to highlight the business

vision and mission. The vision and mission must be

real and appeal to the receiver of the plan as a vision or

mission that is attainable. If the reader is convinced of

such, then your business plan will indeed serve a good

tool for obtaining your financing.

There are several components or chapters to a realistic

business plan and they are as follows:

1. Opening Statement

2. Executive Summary

3. Company/Business Summary

4. Products & Services


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5. Market Analysis Summary

6. Strategy & Implementation Summary

7. Management Summary

8. Financial Plan

9. Closing Statement.

Opening Statement: In this chapter, as the name

implies, the opening statement is used to briefly

introduce the reader to the intention of the business

plan. It is used to indicate whether the plan is for

obtaining financing or to be used as an appraisal of the

business operations for a forthcoming period of time.

Your opening statement should not be too long, one

paragraph, two at most is ideal.

Executive Summary: This section is written last but

in the order of the business plan, stated just after the

opening statement. In fact it is the first actual chapter

of the business plan. This section is a comprehensive

summary of the entire business plan and the most

significant chapter of the plan. In the executive

summary you should describe the Business, The

Customer, Management, Objectives, Vision, Mission,

Financial Highlights and the Start up Requirements.

The reader, who is usually the Loans Officer or

Investor, will read this section first. If the executive

summary fails to impress or convince the reader of the

business viability, you can forget about getting that start

up loan because he/she won’t even proceed to read the

rest of your plan. Chances are the plan may be returned

or tossed in the garbage bin under the desk.

Company/Business Summary: The company or

business summary is a chapter dedicated to describing


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your company or business to the investor. In here, it is

important to state and describe the Owner, Location

and Facilities and to provide an estimate of the Start up

Requirements.

Products and Services: Use this section to describe in

detail, the products and services you will be offering in

your business. In addition write about the Sales

Literature you intend to employ in the promotion of

the products and services. Speak also of the

Technology and Systems that will be employed in the

provision of the products and the services to your

target customer and finally, use this section to highlight

any possible plans for future product or service

development.

Market Analysis Summary: The ground work for

composing this section of the business plan should

have already been done, that is, if your followed the

advice in chapter 1. Journaling, Studying Ideas and

Crunching Numbers all contribute to an effective Market

Analysis Summary. This Section is 100% dependent on

the facts gathered during the development of the

business idea and the feasibility stages.

Use this section to describe the Market Segmentation,

Target Market Segment Strategy, your Service/Product

Business Analysis and the Competition and Buying

Patterns.

Strategy and Implementation Strategy: This section

is necessary to highlight your strategy for promoting

your product and service, stating your competitive

edge(s) over your competition, describing your

marketing and sales strategy. It is also important to


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highlight your sales forecast and to list out the tasks

and milestones in setting up the business and launching

your product and services.

Management Summary: The Management Summary

is the chapter of the plan where you tell the investor of

your strategy for managing the business. An investor

will be very interested in this section because after all,

it’s their money invested into your care! In the

Management Summary it is vital to list the resume′ of

key management personnel, your organization chart or

diagram, the compensation plan and any other

important information on employees and management

staff.

Financial Plan: Apart from the Executive Summary,

the Financial Plan is the second most important part of

the plan. Most investors or loans officers will skip

through the body of the plan, to get to this section.

Here is where all the numbers in the plan is explained.

This section is for Highlighting Important

Assumptions on the business and the market

environment and for highlighting the Break Even

Analysis Chart or Graph.

The most important highlights of the Financial Plan are

the Financial Statements. The Profit/Loss Projection

is a financial statement that will basically highlight all

income and expenses for the plan period and highlight

the profit/loss made at the end of such period. The

Balance Sheet Projection will give an indication of

the value of the business at the end of the projected

period. It should project the expected Assets, Liabilities

and Net Worth of the Business.


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The final part of the Financial Plan is the Cash Flow

Projection. As it is said, “Cash is King!” This

statement projects how the cash will be used in the

operations of a business. Many businesses fail mainly

because cash is mismanaged.

Closing Statement: This is the final part of the plan

and it is the closing summary. It is where you thank the

reader and reinforce your intentions for seeking your

own business.


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Chapter 5

Getting Start Up Capital

For the several successful businesses and companies I

have started or projects undertaken and the many that

were unsuccessful, there is one lesson that I have

learned from every experience. That lesson is “Money

Follows Vision; Vision Does Not Follow Money!”

This is to say that contrary to popular belief, you don’t

need money to start a business. In this case you already

have your vision (The Business Plan) and to the extent

that you can market that vision, you will be able to

obtain the requisite finance to start your operations.

Unless you are born into wealth or have the backing of

wealthy family or friends, then this truth won’t matter

to you but for the typical ambitious reader, this truth is

all you need to understand.

Once your vision is clear and the business plan is solid,

you should have the confidence to pitch your plan and

share your vision with many. At this stage you don’t

have to worry about your idea being stolen because you

already made the business legal. The more people you

share your vision and plan with, the greater probability

there is of you obtaining the finance to start the

business.

In more theoretical terms now, there are several factors

which will influence the success of getting the financing

you seek. You must be able to demonstrate confidence

both in the written plan and in the verbal presentation

of the plan. Secondly, your plan must reflect smart and

solid benefits to the investors and you must be able to

convince the investor of such benefits.


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Another thing I learnt from my experiences is that

most banking officers have a very limited knowledge of

business. In fact the majority lacks any entrepreneurial

instinct and therefore, they most times fail to recognize

potential in a solid business plan. Ever wondered why

banks reject so many loan applications from small

business owners? Well the answer is simple!

The loan officer as an employee of the bank may never

have had the exposure to a business or the desire to

start a business. Their employment is secure and the

entrepreneurial spirit is hard to comprehend. As a small

business owner, I have found more success at

obtaining loans and financing from fellow business

owners or from private investors than from banks.

In Trinidad and Tobago, there are special purpose state

run companies specifically mandated to assist the self

employed and small business owners with financing. In

fact I have accessed financing through NEDCO –

National Entrepreneurship Development Company in

establishing my publishing company Kingdom

Coaching Company which is responsible for publishing

this book.

When I wrote my first book, publishers were hesitant

to publish my works because I was an unknown author.

I registered my own publishing company, did my

business plan, shared the vision convincingly which

was to make publishing services accessible to unknown

authors and today the rest is history as they say.

Publishing my first book opened many doors and the

today I can truly say that Money Follows Vision and not

the other way around. In the end there are many ways


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to obtain business startup capital and there are many

institutions that offer such services, they are:

Family and Friends: Usually the easiest to borrow

from. You can benefit from zero interest payments on

the loan, no collateral requirement and they usually

don’t pressure you for quick repayment. They are

usually close to your business though and may cause

problems. Friends and family believe they have some

natural right to manage your business because they

loaned you the money to start up.

It is best to establish from the onset, the boundaries of

their involvement in your business so that you do not

make enemies with your family or lose friends in the

process.

Private (Angel) Investors: Private investors or angel

investors as they are more professionally called are

more inclined to investing in new businesses. These

individuals may have themselves evolved from

ownership of small businesses and understand well the

challenges of starting a new business. They will invest

in projects or businesses where a return on investment

is guaranteed and in the shortest possible time.

Angel investors don’t usually require collateral however

their interest rates on the investments are higher than

banks, though in recent times, angel investors have

been known to start demanding collateral against loans.

State Run Development Companies: These bodies

are by purpose designed and established to assist in the

provision of startup capital. By approaching and

accessing the government run institutions, one can also


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benefit from the several incubator and training

programs for developing the knowledge and

management skills for small business owners.

Loans are disbursed against very low interest rates and

the collateral requirement is necessary but in most cases

nonexistent. When I approached NEDCO, my loan

was secured against household furniture items.

Venture Capital Firms: VC Firms are more suited to

larger corporations or limited liability companies. They

are risk averse and will lend based on their acceptance

of a solid business plan based on well researched

figures, trends and market environment. A VC Firm’s

investment takes the form of the purchase of a stake in

your company which requires a seat on your board of

directors.

By investing in your company they become part owners

of your business. There are many criterions to be met

when seeking funding from VCs but the success of

your business will benefit from the management input

from the VC Firm.

Banks: As mentioned earlier, banks are the least

unlikely to invest in a small start up business. Unless

you have an established history of banking, borrowing

or saving with your bank, the chances are very slim to

none that you can access a loan.

Providing that your history is sufficient, and all your

documentation is in order, approach your bank with

every confidence of obtaining the loan. The interest

rate at banks varies and the requirement for collateral is


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an absolute must have. Banks though are also very

aggressive in their collection of payments and

repossession of collateral on default.

Now that you have a clearer guidance on the ways in

how to obtain Start up Capital, remember that “Money

Follows Vision; Vision Does Not Follow Money.”


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Chapter 6

Establishing Financial Controls

Probably the most important aspect of starting and

operating a business is the establishment and

implementation of strong financial control. Finance is

like the life source of your business. It is like blood in

human veins. In other words, a business is not a

business without a financial component to it. In

chapter 3 we discussed the business plan and touched

on the Financial Summary which is in the main the

skeleton for establishing financial control.

Financial control simply means monitoring and

management of the income generated and expenses

incurred in the operations of the business. There are

basic steps to establishing and maintaining control of a

business’ finance. While there are many steps that the

experts may suggest and recommend, there is no real

rocket science to this very important aspect of running

your business successfully.

Some the simple steps that I have implemented in

starting new businesses of my own are:

1. Opening a business bank account.

2. Maintaining detailed and accurate records for

income, expenses, taxes, assets, liabilities and other.

3. Seek out an education in financial management.

Your can do this by attending seminars or short

courses.

4. Hire competent accounting staff or outsource

professional services for preparing monthly, semi

and or annual financial reports.


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Opening a business bank account or merchant account

is a very important tool in establishing financial control.

A bank account for your business serves several

important purposes. They are as follows:

1. A business bank account gives your business

credibility. It says to your bankers that you are

serious about your business and the way that the

finances are controlled. It also gives your bank a

front row seat to observing how your business

finances are managed, in which case if it is in a

healthy manner, can earn you favor points when

seeking that loan.

2. Secondly, it establishes your business as a separate

entity and discourages the co-mingling of funds.

Many countries including here in Trinidad and

Tobago have laws and or regulations that

discourages the co-mingling of the proceeds of

business and personal income. No doubt this is a

measure to stamp out or prevent money

laundering, a criminal activity, which can land a

perpetrator some jail time.

One of my early mistakes in running my first business

was to believe that I could manage my company

finances on my own. What a mistake! This cost me

thousands of dollars in back taxes and bad debt and I

learned that an education in accounting and

outsourcing for further validation of the reports I

recorded and prepared, was one of the best decisions I

ever took and can assure you that it will be a good

decision for you too`.


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As your business grows you will recognize that the

reports and the information therein will become very

important.

Good financial control and record keeping will serve as

an advantage to you and your business when seeking

loans or investment for business growth and in the

opposite, poor financial control or record keeping can

prove the undoing of your business.

Establishing financial control apart from the other

important steps highlighted in the previous chapters

and those that follow will prove to be very important

and beneficial measures in starting up and remaining in

business.


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Chapter 7

Considerations at Start Up

If you’re still reading up to this point it means you have

done most of the hard stuff already and you’re on your

way to starting operations of your business. At this

stage there are several considerations that need to be

made to ensure the successful start up of the business.

There are five (5) basic considerations at start up, they

include:

1. Location for the business

2. Privacy

3. Hiring Employees

4. Advertising Strategies and

5. Furniture, Tools & Equipment.

In the following paragraphs of this chapter we will seek

to expand on the five considerations listed above.

Location: choosing a suitable location can prove tricky

and may not seem important but it is a most vital

consideration to be made in starting a business. It is

vital because situating a business in the wrong location

can spell disaster for start ups. For example, you

wouldn’t set up a professional consultancy in an

industrial estate or a retail store in a gated residential

community and it is for these reasons choosing a good

location is important.

Retail stores are best suited for busy pedestrian traffic

areas; manufacturing operations in industrial zones and

professional services in city or metropolitan areas.


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There are several types of businesses such as

professional and practical services that can be started

out of your home and consideration should be given to

this option as it can save you money in the start up

phase and shorten the time taken to start operations. If

you’ve decided that you’ll operate your business from

home then the next step is another important

consideration.

Privacy: all businesses should be operated in private

and if not, disturbance free environments. For the most

part businesses should be housed in accommodations

separate and apart from competing activities. This is

most applicable to home-based businesses, where

privacy and disturbances are most commonly impacted

and affects the best performance of the operations.

If your business is located at home there are several

steps that should be taken to ensure that productivity is

not compromised, they are as follows:

1. Ensure Privacy. Keep your business space separate

from common areas around the home. This can be

best achieved by utilizing a spare room or garage

space or in the worst case, isolate a corner in the

home that you think you could manage some

privacy.

2. Define Workspace Time. Operating a business

from home can create a false sense of comfort and

control. You should define set working hours and

practice being on time to work. It is very easy to

want to steal away from working time to watch TV

or goof around.


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3. Set Working Time Rules. Where there is family

around, be clear to discuss with them upfront

working time from family time. Spouses and

children can be very insensitive to your working

time if the boundaries are not set in advance. By

making clear the rules you will avoid breaking

hearts or making your loved ones feel neglected

and having the peace to work at home will be to

benefit of the business.

Hiring Employees: according to the size of your start

up or the type of business you establish, hiring

employees may be unavoidable. Where it is necessary to

do so, it is important to avoid certain pitfalls that are

mostly overlooked. Choosing bad employees from the

start can stifle business growth and frustrate you whilst

choosing competent employees will benefit you and the

business.

What to avoid when choosing employees.

In choosing employees a small business owner should

avoid two (2) important situations, they are:

1. Avoid Hiring family members or friends. Family

and friends are always the first to pledge support

and make themselves available for selection when

you start out in your business.

As the business prospers, it becomes more and

more difficult to govern and instruct them, because

of their misplaced belief of your obligation to

them. They tend to believe that they become part

owners of the business the longer they stay.


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Furthermore, your leadership can be undermined

or become ineffective especially if enforcing

disciplinary action is required against family and

friends. It is always better to keep family and

friends just that and don’t try to make them your

employees.

2. Avoid Making Promises you can’t honor. One of

the errors that entrepreneurs make when hiring

new employees is making promises you can’t

honor. Many small business owners make this

common mistake so as to put an exaggerated image

of the business and as a result give employees a

false expectation of working at your business.

Giving an employee false hope is like putting

dynamite in the hands of a toddler and leaving the

match on the floor. Eventually that toddler

(employee) is sure to find the match and you can

figure out the result. Let’s just say an employee that

lacks motivation or respect for you is an explosion

waiting to happen.

Things to Ensure you do when hiring employees.

There are several things to ensure when hiring new

employees, of which the first two points are very

obvious. They are:

1. Ensure you don’t hire family members or friends.

2. Ensure you don’t make promises you can’t honor.

3. Be sure to hire qualified and competent staff.

Ensure that qualifications are legitimate.

4. Ensure that references are supplied from the

prospective employees at the time of application.


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5. Check those references for legitimacy.

6. Don’t discriminate! Give every applicant a fair

chance at tryouts or in this case, an interview.

Advertising Strategies: advertising is essential for

attracting customers and clients and generating public

awareness of your new business. There are many forms

of advertising mechanisms that are available to small

businesses and when choosing such, careful

consideration should be made. One should avoid being

enticed into using expensive forms of advertising your

products and business services. Advertising is essential

for business promotion and growth.

There are different forms of advertising that small

business owners can utilize for business promotion,

they are as follows:

Flyers and Brochures: flyers and brochures are the

cheapest form of small business advertising and the

easiest to produce. They are ideal for highlighting

business and product information. A desktop computer

with basic word processing software, a printer and a

ream of paper and you have 500 flyers or brochures to

distribute. Distribution of flyers and brochures can also

be cost effective. They can be distributed in the

newspaper as inserts or in the mail. Flyers and

brochures can also make for personal hand to hand

distribution.

Business Cards: a business card is a highly effective

tool for spreading awareness of your business, its

products and services as well as personal information

on the owner or representative. The business card is a


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very personal form of advertising as it is usually

distributed by hand to hand exchange. It can also serve

as a tool for meeting and growing contacts at network

and other social events.

A business card may vary in size but the most common

size 3.5 inches x 2 inches. On a business card you can

and should include the business name, the

representative’s name, business address, phone, fax and

email contact, website address and if possible include

your business logo or product photo. The good news

for startups is that you can design and cut your own

business cards or ordered at very low cost.

Classified Ads: a small business can benefit from

placing advertisements in the local newspaper or

magazines at affordable costs. Classifieds are cheaper

than display ads which require professional graphic

design services. Instead classified ads are text based and

the cost is determined by applying a rate per word per

day. The classifieds sections of newspapers and

magazines are widely searched by potential buyers and

you can generally expect good results.

Extra visibility can be achieved by manipulating or

enhancing text fonts adding bullet points and

highlighting key text and numbers.

Business Documents: is a highly under-utilized and

even unrecognized form of small business advertising.

It is expected that during everyday business

communications, several types of business documents

are generated and exchanged between the business, its

customers, employees, suppliers and regulators. These


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documents include letters, invoices, quotations, receipts,

purchase orders, reports and proposals.

Images of products and or the listing of services can be

creatively inserted on these documents in spaces in the

header, footer or side bars and serve to increase

awareness of their existence to persons whom the

documents are exchanged with. The benefits of this

form of advertising for small businesses are that it is

cheap as no extra costs are incurred for preparation and

distribution.

Newsletter: newsletters are another form of small

business advertising which is practical and inexpensive

to distribute a well. Content in newsletter could be

compiled in a one page document or even into

multipage editions depending on the volume of

information to be included. Newsletters can be

distributed in ways similar to flyers and brochures and

as well as via internet email.

Mail Order Catalogs: mail order catalogs are more

expensive to produce but costs can be bridged by

producing fewer editions per year. Mail order catalogs

can prove highly effective for persons operating

product distribution businesses either home-based or

where no formal walk-in warehouse stores are

established. The mail order catalog by design is

intended to be preserved or put away for later

reference, thereby increasing its lifetime over business

cards, flyers, brochures and newsletters.

Internet Technology: internet technology is now

more than ever the premier form of business


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communication and interaction. Even with the advent

of social media networking, using the internet for

product and service advertising for small business is an

invaluable tool and asset for the small business owner.

The internet offers email for communication, websites

for creating virtual offices and storefronts and several

other applications for voice and other communications.

There are several do-it-yourself email and website

building services offered online and entrepreneurs can

easily build and continuously develop the business

websites online.

Where website development knowledge is limited it is

wisely recommended to hire a professional web-builder

to design and develop your business website. Be sure to

include information of everything related to your

business and where possible, include a storefront to

conduct sale of products and services. Make sure to

include your email and website addresses on all your

business documents to make it known that you indeed

have a website or email.

Having a professionally designed website may cost

plenty upfront but customers appreciate a business

with a website and email as it gives the impression of a

legitimate and well organized business and offers

reliability in business communication.

Furniture, Tools and Equipment.

The final major consideration every entrepreneur must

make when starting up their new business is the choice

of furniture, tools and equipment. These items are


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essential for ensuring operatives comfort and

productivity of the business. Selections should be made

on functionality and expensive items should be avoided

if less expensive items can offer the same or close

enough features and functionality.

Keeping in mind that your business is new, it is vital to

limit high upfront costs on items that depreciate over

time and end up being liabilities rather assets.


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Concluding Section One

In section one, How To Start Up A Business, we detailed

and discussed the steps necessary to inform individuals

desirous of starting their own small businesses and the

steps and considerations necessary. After reading

section one, the reader should be clear on what is

required to start their new small business.

From the idea conception stage through to business

planning, registration and incorporation, and physical

planning requirements; enough information is

disseminated to encourage and guide the entrepreneur

in starting your business.

If you have taken action and started your business, it is

important that you continue on reading section two,

How To Remain In Business where we will focus on

policy, development and growing your new business.

We encourage you to read on and hope that you will

apply the recommendations offered in the following

chapters.


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SECTION TWO

HOW TO REMAIN

IN BUSINESS

Coming Soon!

For other books by the author visit http://smedirect.webs.com/apps/webstore/


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